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Supreme Court Rejects Apple eBooks Price-Fixing Appeal (reuters.com)
chasm22 writes: The Supreme Court on Monday declined to hear Apple Inc's challenge to an appellate court decision that it conspired with five publishers to increase e-book prices, meaning it will have to pay $450 million as part of a settlement. The court's decision not to hear the case leaves in place a June 2015 ruling by the New York-based 2nd U.S. Circuit Court of Appeals that found Apple liable for engaging in a conspiracy that violated federal antitrust laws. Apple, in asking the high court to hear the case, said the June appeals court decision that the company had conspired with the publishers contradicted Supreme Court precedent and would "chill innovation and risk-taking." The 2nd Circuit's ruling followed a 2013 decision by U.S. District Judge Denise Cote that Apple played a "central role" in a conspiracy with publishers to raise e-book prices. The Justice Department said the scheme caused some e-book prices to rise to $12.99 or $14.99 from the $9.99 price previously charged by market leader Amazon.com Inc. "Apple liability for knowingly conspiring with book publishers to raise the prices of e-books is settled once and for all," said Bill Baer, head of the U.S. Justice Department's antitrust division.
Perhaps Congress should change the price fixing laws... What about Amazon? Just trying to anticipate the response from Apple.
Perhaps Congress should change the price fixing laws... What about Amazon? Just trying to anticipate the response from Apple.
Perhaps Congress should change the price fixing laws...
There aren't really "price-fixing laws." The Sherman Anti-Trust act prohibits "restraint of trade," which is written by Congress to allow courts to develop antitrust law however they want. Technically every contract made could be "restraint of trade," but the courts generally only apply it to certain pretty explicit anti-competitive behavior, such as explicit price-fixing with competitors. You are still allowed to do other things which discourage competition, like integrating vertically within an industry.
I'm wondering if Scalia's death caused them to lose. Apple was probably counting on his vote when they first agreed to pursue the litigation instead of settling for $70 mil. It's amazing how much of affect SCOTUS has. Probably too much...
No. It take four justices to agree to hear a case, which means that if Justice's Scalia's death made a difference in terms of whether they would hear the case, then they would have only had four justices on their side and would not have been able to win at the Supreme Court anyway.
Realistically, the Supreme Court very rarely takes cases to begin with. Big name parties like Apple makes them more likely to be heard, because the justices may be more interested and they will hire good experts to write the briefs and get amici on-board and the like, but it is still very unlikely. But complicated cases like in-depth patent or anti-trust cases are usually bad cases for making new case law, and they take up a lot of time, so the Supreme Court usually doesn't hear them anyway.
Ha ha! Good one! Apple did it so they didn't have to compete on price, and for no other reason.
Amazon does not dictate price. Amazons buys books from the publisher and resells them for whatever price Amazon wants. They can buy a book for $5 and sell it for $10, or they can buy it or $5 and sell it for $2. And all of their competitors can sell books for whatever price the competitors want. The pressure Amazon can exert is on the publishers, to get the best price. But the competitors are still free to set their own prices, even if it may be painful to compete with Amazon.
Of course, this model is intolerable to Apple. There is no shiny to be sold with an ebook. A book purchased from Amazon is indistinguishable from one purchased from Apple! The only way for Apple to compete would be on price! The horror!
So, what Apple did was go to the publishers and get them to change to the agency model. No longer would the publishers sell to the retailers with the retailers setting their own prices. The PUBLISHER would set the price to the CONSUMER, and the retailer would get a cut of that. Apple would get its 30%. So far, no real problem. Here is where the problem occurs - Apple made deals with the publishers that NOBODY could SELL a book for less than Apples price. Even if a competitor was willing to take a smaller cut the price to the consumer could not fall, the publisher just kept more. Prices were, wait for it, fixed.